BMW 2011 Annual Report Download - page 168

168
152 STATEMENT ON
CORPORATE GOVERNANCE
(Part of Management Report)
152 Information on the Company’s
Governing Constitution
153 Declaration of the Board of
Management and of the
Supervisory Board pursuant to
§ 161 AktG
154 Members of the Board of
Management
155 Members of the Supervisory Board
158 Work Procedures of the
Board of Management
160 Work Procedures of the
Supervisory Board
165 Compensation Report
173 Information on Corporate
Governance Practices
175 Compliance in the BMW Group
Compensation claims, entitlements to receive amounts
from third parties
If a board member’s mandate is terminated early with-
out important reason, there are no contractual commit-
ments to pay compensation. Similarly, there are no
commitments to pay compensation for early termination
in the event of a change of control or a takeover offer.
No members of the Board of Management received any
payments or benefits from third parties in 2011 on
account of their activities as members of the Board of
Management of BMW AG.
Overview of compensation system and compensation components
Component Parameter / measurement base
Salary
for 2011 (for financial year 2012 and thereafter)
Member of the Board of Management:
– € 0.51 million (€ 0.75 million) p. a. (first term of appointment)
– € 0.59 million (€ 0.90 million) p. a. (from second term of appointment onwards)
Chairman of the Board of Management:
– € 1.02 million (€ 1.50 million) p. a.
Variable compensation
Bonus Target bonuses (if target is 100 % achieved):
– € 1.50 million p. a. (first term of appointment)
– € 1.75 million p. a. (from second term of appointment onwards)
– € 3.00 million p. a. (Chairman of the Board of Management)
– Upper limit: 250 %
a) Corporate earnings-related bonus
(corresponds to 50 % of target bonus if target is 100 %
achieved)
– Quantitative criteria fixed in advance for a period of three financial years
– Formula: 50 % of target bonus x earnings factor x dividend factor (common stock)
– The earnings factor is derived from the Group net profit and the Group post-tax return
on sales
b) Performance-related bonus
(corresponds to 50 % of target bonus if target is 100 %
achieved)
– Primarily qualitative criteria, expressed in terms of a performance factor aimed at
measuring the board members contribution to sustainable and long-term performance
and the future viability of the business
– Formula: 50 % of target bonus x performance factor
– Other criteria for performance factor: innovation (economic and ecological, e. g. reduc-
tion of CO2 emissions), leadership skills and attractiveness as employeer, progress in
implementing diversity concept, corporate social responsibility
Special bonus payments May be paid in justified circumstances on appropriate basis, contractual basis, no
entitlement
Share-based remuneration programme
a) Cash remuneration component
b) Share-based remuneration component
(matching component)
– Requirement for Board of Management members to invest each an amount equivalent
to 20 % of their total bonus (after tax) in BMW AG common stock
–
Earmarked cash remuneration equivalent to the amount required to be invested in
BMW AG shares, plus taxes and social insurance contributions
– Once the four-year holding period requirement is fulfilled, Board of Management
members receive for each three common stock shares held either – at the Company’s
option –
one further share of common stock or the equivalent amount in cash, unless
the employment relationship was ended before expiry of the agreed contractual period
(except where caused by death or invalidity).
Other remuneration
Contractual agreement, main points: use of company cars, insurance premiums,
contributions towards security systems, medical check-up
Compensation entitlements on termination of contract, compensation entitlements in event of change of control or takeover bid
No contractual entitlements
Retirement and surviving dependants’ benefits
Model Principal features
a) Defined benefits
(only applies to board members appointed for the first
time before 1 January 2010; based on legal right to
receive the benefits already promised to them, this group
of persons is entitled to opt between (a) and (b))
Pension of base amount of € 10,000 (Chairman: € 15,000) plus fixed amounts based on
length of Company and board service
b) Defined contribution system since 1 January 2010 with
guaranteed minimum rate of return
Pension based on amounts credited to individual savings accounts for contributions paid
and interest earned
Annual contribution for board member (Chairman)
for 2011: € 270,000 (€ 475,000)
for financial year 2012 and thereafter: € 300,000 (€ 525,000)
Various forms of disbursement